New insurance wants inspection ?

11 Replies

Hey everyone here at BP, Was hoping some one could shed some light on this. I recently decided to go with travelers insurance for my homeowners policy on a live in rental. Switching over from Allstate. Allstate I’m paying around $1,350.00 Travelers through GEICO is $944.00 So a pretty decent savings. The policy is to go into effect on the 21st. I just received the policy in the mail and the first page is about a property insurance inspection. Now I’m aware that a lot of companies will do a drive by but from what this letter is telling me, they’re going to want to come inside. That’s a potential head ache for me, I’ll admit theirs some things that I’m working on fixing. So my concern is they come do the inspection, tel me I have to make XYZ repairs and or they can’t/won’t insure me. Then I have to try to scramble to get my old insurance back. Is this worth the head ache ? I’ve never herd of an insurance company actually coming in to do an inspection. Allstate certainly did not.
@Caleb Heimsoth agreed that was my worry. I’m going to just stay with Allstate No inspection and yes slightly more expensive but I’m sure it’s better than letting them come in

On he last property that we bought, the insurance company had an inspector do an on site inspection.  It was not a big deal at all.  I had the inspection  delayed for a couple of weeks so that I could have a new HVAC system installed first.  

It makes sense to me that they would want an inspection , and I am glad, so that my premium doesn't have to be more expensive, just  because they also insure some sub-standard properties,  that have a bigger chance of making a claim.

The insurance company just wants to see what they are insuring, so that they can know if they want it or not.  We do they same thing as prospective property buyers.

@Nicholas Weckstein It’s not uncommon for an insurance company to do an interior inspection. I’m an independent agent in Pennsylvania and we do them quite often. Some companies want to, some don’t. Them wanting to perform an inspection is not necessarily the end of the world, they might do the inspection and be okay with everything. Sometimes they are willing to work with you on things to give you time to make fixes and updates if they do find something. Really the big thing they are looking for is to make sure the property is in decent shape and Insurance companies do not like alternative heating methods such as space heaters and wood stoves. if your property has any of those heating sources its almost guarenteed your property will be inspected. Again not necessarily a deal breaker, but adda headaches for you. In the future when you are getting quotes make sure you ask your agent or insurance company if an inspection will be required. They should be able to do it before they make the policy effective and therefor before you cancel your current insurance.
@Nick Heil thanks for the reply. See that’s my worry. New policy takes place on the 21st but the inspection isn’t done yet. I can’t run that risk. Ironic you said space heaters because the heating is electric baseboard which I’m not sure is the same but seems like it. I just don’t need an inspector poking around telling me I have to do certain things. Just going to stay with Allstate. Could have saved around $450 a year but not worth the hassle
Originally posted by @Nicholas Weckstein :
@Nick Heil thanks for the reply. See that’s my worry. New policy takes place on the 21st but the inspection isn’t done yet. I can’t run that risk.

Ironic you said space heaters because the heating is electric baseboard which I’m not sure is the same but seems like it. I just don’t need an inspector poking around telling me I have to do certain things. Just going to stay with Allstate. Could have saved around $450 a year but not worth the hassle

No problem! I certainly understand  avoiding the hassle. Try getting connected with a local independent agent in your area that can go to multiple companies at once. They could do the majority of the leg work for you and even do the inspection themselves (and send the inspection to multiple companies). Could save you a lot of money and also get you a professional coverage review.

Good luck!

Nicholas since the rate is much lower not just  a little it sounds like they will be a stickler for property condition. If an investor pays a higher premium they can usually price in more claim risk and unknowns.

We get these on commercial retail centers for my clients. Some insurance companies have an ISO inspector before the purchase and some wait until after closing. If after closing in fine print they reserve the right to inspect and change the policy quote. This is because investors might have property conditions they are not even aware of or they have issues they know of but omit from the paperwork they fill out to get a quote.

Insurance companies have been around the block a few times. Investors sometimes think they can get a cheap policy and then drop big ticket claims on the insurance. When insurance companies have insured hundreds to thousands of policies or more they get seasoned pretty quickly.

I have found this on commercial loans also with LTV and risk. If buyer is putting a bunch down then they tend to ask less questions. If LTV is 75% and cap rate is lower the lender asks tons of questions and is very strict on underwriting.

@Joel Owens That all does make sense. Funny you should say that also because I just got off the phone with them and they told me the inspection won’t take place until after the policy goes into effect. Seems like bait and switch to me. I fully understand why they do the inspection and don’t have a problem with that. But let’s say they come inspect and say oh well it’s going to be more expensive now. Which I’m sure will happen. At that point I would have already canceled my other policy. Not worth the head ache for 40$ a month in my opinion.
also while I’m on the topic, curious if anyone in PA can tell me what they’re paying for landlord policies. It’s a triplex. I feel like either way 944 or 1350 is still pretty expensive.

@Nicholas Weckstein

Those rates seem reasonable but it depends on the property. 

Many insurance companies do inspections. Note that what they look for is different than what say a building code officer is looking for. 

Moving forward, I would just work with an insurance broker to get the policies. Just do a shot gun and get the best policy that fits your needs. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information